On Friday, October 16, the British Pound depreciated significantly against the US Dollar. The GBP/USD currency pair has already lost 48 pips or 0.37%.
It is likely that the drop occurred, as the national government put Lancashire area in northwest England into the highest COVID alert. Thus, the area will face the toughest restrictions to control the spread of the coronavirus.
Note that restrictions will come into force on Saturday, October 17.
Update to Original Article:The initial drop of GBP/USD was a 100 pip move. This attracted the attention of our analysts and the lockdown measure announcement was spotted on news feeds.
At the time, an upcoming speech on trade with the EU was expected from the Prime Minister of the United Kingdom Boris Johnson.
Afterwards, some stated that the drop was caused by the announcement of the UK Prime Minister due to the canceling of trade talks with the EU. However, the Prime Minister made his announcement around 12:40 GMT. Meanwhile, as seen on the chart below, the drop started at 10:50 GMT.